Poverty is once again on the political agenda in America. And one of the most persistent myths surrounding this issue is that the best way to reduce poverty is to increase equal opportunity. This is a common idea among both liberals and conservatives. Many people believe, for instance, that if the poor had much better educational opportunities, the poverty rate would go down.
Unfortunately, this is not true. Improving opportunity and reducing poverty are actually two separate issues. Even if we were to be successful in significantly increasing economic opportunity in this country, this would do virtually nothing to reduce the number of poor people here. At best, it would just create equal opportunity poverty.
Think of it this way: Imagine that we have greatly reduced the obstacles to equal opportunity. There is no longer racial or gender discrimination in the workplace. There is open access to plentiful job training and retraining programs. Preschool becomes universal. All children go to high quality schools, and college is now low cost or free. What effect would all this have on the poverty rate? None. All it would do would be to change who is likely to be poor. Fewer women, minorities and disadvantaged children would wind up poor. This would be good and it would be an important step forward. But we need to be clear that it will do nothing to reduce the overall number of people in poverty.
That is because poverty is not caused by unequal opportunity. Unequal opportunity helps explain why certain groups of people tend to end up poor, but it does not explain why we have poverty. The real causes of poverty are two-fold: lack of jobs and too many jobs paying poverty-level wages.
If you include long-term "discouraged workers" (people who are no longer looking for work and who are not counted in our official unemployment rate), then the actual number of jobless Americans is now over 20 percent. Obviously people who lack jobs are going to have a very high rate of poverty
The job market is like a game of musical chairs. There are fewer chairs (jobs) than there are players (job seekers). Even if we give all the players an equal chance to get into a chair, there will always be some losers. You could train some players to be better at the game, but this would only change who the winners are -- the number of losers would remain the same.
The other cause of poverty is the growth of jobs that do not pay enough to get out of poverty. The appalling fact is that a quarter of all jobs in this country pay less than $23,000 a year, which is the official poverty line for a family of four. So for millions of Americans, having a job is not enough for them to avoid poverty.
Giving more people a fair chance to succeed will do nothing to create more jobs or better paying jobs. Even if everyone in the U.S. were to earn a college degree, that would only mean that we would have more highly educated people in unemployment lines and serving us at McDonalds.
If we really want to reduce poverty, we need more government policies to encourage job creation. Some have suggested, for instance, a New Deal like job creation program to rebuild bridges, fix roads, improve parks, build low-cost housing, etc. And we need to improve wages. Raising the minimum wage would help on that score. Better yet would be government policies to encourage more unionization in the workplace and strengthen the bargaining power of workers.
Going back to the analogy of musical chairs, we need to quit focusing only on improving the chances of those playing the game, and actually change the game itself. We must add more chairs -- more jobs and higher paying jobs -- to decrease the number of people who must inevitably lose out in our economy.